CDP is a not-for-profit charity that runs the global disclosure system for investors, companies, cities, states and regions to manage their environmental impacts in three areas: climate change, water security, and deforestation. Over the past 20 years, CDP has created a system that has resulted in unparalleled engagement on environmental issues worldwide. It publishes two annual ‘A Lists’ on environmental performance and transparency – one for companies and one for cities.
Relevant to climate, CDP requests information on climate risks and low carbon opportunities from the world’s largest companies on behalf of over 590 institutional investor signatories with a combined US$110 trillion in assets and 200+ major purchasers with over US$5.5 trillion in procurement spend.
CDP’s disclosure platform provides the mechanism for reporting in line with the Task Force on Climate-related Financial Disclosures (TCFD) recommendations. In 2021, CDP’s climate change questionnaire contains over 25 TCFD-aligned questions. These questions are contained within the Governance, Risks & Opportunities, Strategy, Targets and Emissions modules of CDP’s questionnaire and include specific questions for 16 high-impact sectors such as financial services, energy, agriculture, transport and materials.
Why it matters
CDP is the largest TCFD-aligned environmental database in the world
Over 9,600 companies reported through CDP on climate change, water security and forests, in 2020. As such, it is the world’s largest, most comprehensive dataset on environmental action. Responding to CDP requests is a significant step towards widely recognised leadership on environmental performance.
CDP held data helps drive investment decisions for a low carbon economy
CDP scores, ranging from A to D-, are widely used to drive investment and procurement decisions towards a zero carbon, sustainable and resilient economy. The insights that CDP holds empower investors, companies, cities, and national and regional governments to make the right choices to build an economy that works for people and planet in the long term.
Responding to CDP helps increase alignment with the TCFD recommendations
The recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) highlight the important role of the financial sector (i.e., banks, insurance companies, asset owners and asset managers) as preparers of climate-related financial disclosures. Such disclosures will enable investors, central banks, regulators/supervisors and other relevant stakeholders to better understand the financial system’s exposures to climate-related risks.
Resources and specific guidance are available on the CDP website on topics such as the benefits of disclosing (including company case studies), setting science-based targets, as well as benchmarking with peers. In addition, CDP holds a series of topical webinars on a regular basis, designed to improve understanding of CDP disclosure and build capacity for best practice environmental action.
Main areas of work related to climate mainstreaming:
CDP’s financial services questions on climate change focus on the following topics:
- Portfolio exposure to climate-related risks and opportunities;
- Climate-related issues in the organization’s policy framework;
- Exclusion policies;
- Engagement with clients and investee companies;
- Portfolio impact (GHG Protocol Scope 3 “Category 15: Investments” emissions or alternative exposure metrics);
- Portfolio alignment to a well below 2-degree world; and
- Climate-related considerations in employment-based retirement schemes.
In addition, as part of the We Mean Business Coalition, CDP provides the central platform for businesses to commit to action such as:
- Adopting a science-based emissions reduction target to generate the innovations needed to transition to a low-carbon, sustainable economy;
- Accelerating the transition to electric vehicles (EVs) and making electric transport the new normal by 2030;
- Putting a price on carbon;
- Implementing the recommendations of the Task Force on Climate-related Financial Disclosures;
- Improving energy productivity, doubling output in quantified, time-bound targets;
- Responsible corporate engagement in climate policy; and
- Using 100% renewable power or improving energy productivity.